Mercedes boss Toto Wolff has called on Ferrari to "cure their illness" following the Scuderia's Hockenheim horror show.
The Italian team headed into qualifying with the faster machinery, but disaster struck in the opening moments as Sebastian Vettel pulled into the pits, suffering a problem with the air flow to the turbo.
His mechanics were unable to fix the issue. The four-time world champion would not set a lap.
As the crestfallen German watched on from the sidelines, the stage was seemingly set for Charles Leclerc to rescue Ferrari's day.
But the sight of Leclerc's mechanics scurrying around the back of his car, and the under-fire team principal Mattia Binotto pacing the garage, raised alarm bells.
Minutes later, Leclerc clambered out of his car, a fuel-system error preventing him from participating in the shoot-out for pole. He is set to start 10th.
Hamilton, battling a cold this weekend, went unchallenged to secure the 87th pole of his career. Red Bull driver Max Verstappen will join the world champion on the front row. Valtteri Bottas, 39 points behind Hamilton in the title standings, lines up in third.
Ferrari's double mechanical problem is the latest in a succession of blows to both the team, without a single victory this year, and Vettel, winless since last August's Belgian Grand Prix.
Ferrari, the sport's most successful team, last clinched a drivers' championship in 2007 and a constructors' title in 2008. Binotto was charged as the man to bring back the team's glory days, replacing Maurizio Arrivabene ahead of the new campaign.
But question marks linger over the former technical director's credentials to lead the Scuderia following their underwhelming campaign. At the halfway stage, only a miracle will now allow Ferrari to beat Mercedes to either title.
Wolff is on course to oversee a record sixth consecutive drivers' and team triumphs for Mercedes. The Austrian pulled few punches in his assessment of their rivals.
"Ferrari has an illness and they need to cure that," he said. "It's just a shame. We need them for a strong championship."
Vettel, who will start his home event an eye-watering 100 points behind Hamilton, said: "Obviously I am very bitter as the car is great and we have lost out on a big chance.
"I am looking forward to the race, but it would have been nicer to start at the front than the very back."
At the sharp end, Hamilton is poised to extend his lead following Ferrari's implosion.
This, despite the Briton admitting a contingency plan was set up for reserve driver Esteban Ocon to take his place for qualifying.
"It doesn't make any difference in the sense you are just trying to do the best job you can," said Hamilton of Ferrari's capitulation. "It is a horrible, so they will be feeling it.
"I wasn't feeling good this morning. I have a sore throat, so we prepped in case I would not be able to do the session.
"We were prepared to put the reserve driver in the car in the worst-case scenario."
Upon crossing the line, Wolff made a rare appearance on the team radio.
"Lewis, you never cease to amaze us," he said, with the Briton on an unstoppable charge towards championship number six.